When you’re choosing an individual health insurance plan, it’s a good idea to look at all of the costs that are part of a plan. With so many terms and facts to know, it can be hard to keep it all straight.
What’s a premium? Your health insurance premium is the amount you pay every month to keep your health insurance plan active. It’s just like paying your monthly electric or phone bill. Your premium is just one of the costs you pay for health insurance. A health insurance plan with lower premiums might mean you pay more out-of-pocket when you actually get care. (More on out-of-pocket costs below.) When you’re choosing a health insurance plan, it’s a good idea to look at all of the costs that are part of a plan. You want to ensure your plan helps keep your out-of-pocket costs down when you get care from the doctors and hospitals you choose. What’s a deductible? Your deductible is the amount you have to spend on your medical care each year before your health insurance plan starts helping you pay. Your premium doesn’t count toward your deductible. Say your deductible is $500. That means your insurance won’t pay for most services until you’ve been charged $500 of your own money for your healthcare services. After that, you start sharing the costs with your health insurance plan for medical care covered under your insurance. What’s a co-pay? What’s co-insurance? Co-pays and co-insurance are two different ways for you to pay your share of the costs for your medical care. A co-pay is a fixed amount you pay each time you use a healthcare service – for example, paying $20 when you go to the doctor. On the other hand, co-insurance is a percentage you pay for the cost of a healthcare service – for example, paying 20 percent of the cost of your hospital stay. This cost sharing between you and your health insurance plan typically begins after you’ve met your deductible for the year. What are out-of-pocket costs? Your out-of-pocket costs are your total expenses for medical care that are not paid by your health insurance plan. This includes your deductible, co-pay and co-insurance amounts for services covered under your health insurance. It also includes your expenses for any healthcare services that your plan does not cover. When you’re choosing a health insurance plan, it’s a good idea to look at all of the costs that are part of a plan. You want to ensure your plan helps keep your out-of-pocket costs down when you get care from the doctors and hospitals you choose. What is an out-of-pocket maximum? Your out-of-pocket maximum is the most you’ll pay during a plan’s coverage period (usually one year) before your plan pays 100 percent of your covered essential health costs. Your deductibles, co-pays, co-insurance and other qualified expenses count toward your out-of-pocket maximum – but your premiums, and any spending on out-of-network or non-essential care don’t.Carolinas HealthCare System is here to help. We’re available to answer your questions and help you find the right health insurance plan for you.
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